Estate Issues (Continued)

            Last month we talked about how estates are monitored in terms of their distribution and how a party who feels that they have been aggrieved can begin to deal with those issues. This month, we will talk more about the complaints process and the philosophical reasons as to why our system is a complaints driven process.

            The normal way in which an estate proceeds is that the executor circulates a statement of receipts and disbursements to all of the beneficiaries and suggests a final distribution, and if the executor is claiming an executor fee, the executor proposes the fee. The beneficiaries are asked to review the statement of receipts and disbursements and if they find it to be in order they sign a release. When the executor has all releases in hand the executor proceeds with the final distribution. The difficulty is that some executors are not as detailed in their record-keeping, and when that happens the administration of estates can become quite contentious. The better the record-keeping, and the more complete the disclosure, the less difficulty that one normally encounters in estate matters. Difficulties arise when beneficiaries are not happy with what has been done financially or, even worse, when they do not know that they were named as a beneficiary.

            In these cases, the normal remedy is for a person who feels that they have been wronged to bring an application to the Court of Queens Bench calling upon the executor to pass his or her accounts in front of a judge. If the executor has not properly disclosed the finances of the estate to the beneficiaries, the judge will normally order that a proper passing of accounts be done. This means that the executor must fully detail and disclose all receipts and disbursements of the estate to the satisfaction of the Court. The aggrieved beneficiaries are permitted to make arguments in front the judge as well as to what they feel has been deficient in the reporting.

            Some have suggested that every estate should have a final requirement to have someone certify that the distribution has been done properly. While in theory that would be an admirable concept, the difficulty is that many estates are administered properly and, above all, most people value choice and they do not like to have fees and procedures imposed upon them as mandatory. If a Court were doing a final certification as suggested there would inevitably be significant costs associated with such a system. Those costs are fine when there are problems or issues deserving the costs. On the cases that do not have problems or issues, however, people are reluctant to be forced to expend costs or go through a procedure which they feel is unnecessary.

            Similarly, some have suggested that there ought to be a requirement that a lawyer certify that things have been done properly. In many cases, the lawyer has had very little to do with the actual distribution of funds. People often prefer to handle distributions themselves in order to keep their costs down. People do not generally like to be told that they must use a lawyer for anything. Many people prefer to use lawyers as little as possible. If the lawyer has not been involved in the distribution it would be extremely difficult for a lawyer to certify that things have been completed properly. Requiring such a certification from a lawyer would necessitate costs in terms of the lawyer satisfying himself or herself that the distribution has been done properly. In addition, the lawyer would be taking on responsibility or potential liability for the certification in circumstances when they really might not have full knowledge as to what has been done in relation to the estate. Accordingly, by way of a combination of general respect for the freedoms of choice that we have in our society, and the practical and cost logistics of doing things otherwise, our system has generally functioned as a complaints driven system for estates.

            That concludes our two part series in response to the first question posed by one of our readers. Next month we will address another question.